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The_11 (2)II,The,the,2The,11the,THE

    The

    Dec.2005,Vo1.1,No.7(Monthly)?ournalofModernAccountingandAuditing,ISSN1548-6583,USA ;TheResearchontheMethodstoConfirmtheKeyControlPoints

    ;oftheInternalAccountingControl

    ;LiupingChenSundiZhao‟JiangsuUniversity

    ;WenchenZhaoSt.John‟sUniversityJingfingCaoJiangsuUniversity‟

    ;Abstract:Thecontrolpointsarethekeyissueoftheintemalcontrol,andthekeycontrolpointsmeanthe ;controljointsthatplayanimportantpanintheprocessoftheoperation.Ifthesekeycontrolpointsarenotwell

    ;controlled,theprocessoftheoperationdisposalwillbemistakenandcannotreachthegoa1.However,forthe

    ;confirmationofthecontrolpoints,manystudiesonlydoqualitativeresearchfromtheimportantaspectinsteadof

    ;quantificationalresearch.Theyaredevoidofaseriesofscientificmethods.Thispaperadvancesquarttificational

    ;methodstoconfirmthekeycontrolpointsfromtwoaspectsofjobevaluationandmathematicsmode1. ;Keywords:accountingcontrol;keycontrolpoints;quantificationalmethods

    ;Confirmingthecontrolpointsisthekeyissueoftheinternalaccountinginstitutionincorporations.Thekey

    ;controlpointsmeanthecontroljointsthatplayanimportantpartintheprocessofanoperation.Ifthesekey ;controlpointsarenotwellcontrolled,theprocessoftheoperationdisposalwillbemistakenandfraudulent,which

    ;leadstotheresultthegoalcannotbereached.Intheformerresearches,manyscholarshaverealizedthe ;importanceofthekeycontrolpoints.Theyalwaysrefertothekeycontrolpointanditsconception.Butwhenit

    ;referstohowtoconfirmwhetheracontroljointisakeycontrolpomtornot,theyonlytaketheaspectof ;importanceintoaccountanddolittlequantificationalresearch.Itleadstosubjectiveconfirmationofthekey

    ;controlpointsandgreatlyimpactstherealizationofthegoaloftheinternalaccountingcontro1.Thispaper ;emphasizesthediscussionaboutthequantificationalmethodstoconfirmthekeycontrolpoints. ;Toconfirmthekeycontrolpoints,thecorporationsneedtoconsiderthreefactorshereinafter.(1)Therisk ;factors.Internalaccountingcontrolisthenecessaryjointoftheriskgovemance.Itsimpetusisfromtherisk ;understandingandgovemancetoagreatextent.Theprobabilitymeanstheprobabilityoftheriskthatthecontrol

    ;pointisoutofcontrol,thewholecorporationandthematerialoperationcannotreachthegoaloftheintemal ;accountingcontro1.(2)Thecosffincomefactors.Excessivecontrolpointsoftheinternalaccountingcontrolresult

    ;indiseconomy.Whileinsufficientcontrolpointsbringonthevalidityofthecontrolinstitution.Settingthecontrol

    ;pointsneedstothinkovertherelationshipbetweenthecostandtheincome,andmakeeveryefforttoreacht

he

    ;bestcontroleffectbyreasonablecontrolcost.(3)Theimportantelementsandresourcesfactor.Inthecorporations.

    ;everyoperationoroperationjointisinvolvedwithfactorsandresourcessuchasmanpower,finance,material

    ;„LiupingChen,master,associateprofessorofSchoolofBusinessAdministration,JiangsuUniversity;Mainresearchfield:Financial

    ;TheoryandMethod.

    ;“SundiZhao,master‟associateprofessorofSchoolofAppliedScience&Technology,JiangsuUni

    versity;Mainresearchfield:

    ;AccountingTheoryandMethod.

    ;:WLL‟Jenchen.Zhao,postgraduateofSt.John,sUniversity,Queens,NewYork11439;Mainresearchfield:AccountingTheoryand

    ;:‟LL.JJingjingCao,postgraduateofSchoolofBusinessAdministration,JiangsuUniversity;Mainresea

    rchfield:AuditingTheoryand

    ;50

    ;

    ;TheResearchontheMethodstoConfirmtheKeyControlPointsoftheInternalAccountingControl ;resources,timeandcommunicationtechnique.Theimpactofthesefactorsandresourcesonthecontrolpoints

    ;shouldbetakenintoaccount.

    ;1.MethodsofJobEvaluation

    ;Confirmingthekeycontrolpointsisarelativelycomplexissue,whichcanusearrangementmethod,factors

    ;comparison,number-checkingandHesseMatrixtomakeappraisement.

    ;1.IArrangementMethod‟

    ;Thismethodarrangestheoperationjointsfromthehightothelowaccordingtotherelativeva!ueofallkinds

    ;ofoperationjointsandthecontributiontorealizationofthegoaloftheintemalaccountingcontro1.Theobjectsof

    ;thearrangementaretheoperationjointsthemselves.Theimplementationprocessofthismethodis:(1)Selectthe

    ;operationjoints(controlpoints);(21Acquirethedatawhichevaluationneeds;(3)Evaluateandarrange,let

    ;valuatorsmakearrangementfromthetoptothebottom.Inarrangingprocess,alternatearrangementcanbeused.

    ;Thatistosay,firstly,selecttheoperationjointofthehighestvalue;secondly,selectthelowestone;thirdly,select

    ;thesecondhighestandthesecondlowestandsoon.Thereasonisthatitiscomparativelyeasyforpeopleto ;identifytheextremesituation.Thearrangementmethodinappraisementcanalsousethematch-comparemethod.

    ;Furthermore,thismethodismorereliablethanthesimple-arrangementandthealternate?arrangementmethod.

    ;Thearrangementmethodismostordinaryofalltheappraisingmethods.Itsprimaryadvantageissimplici

ty

    ;andconvenience.Itiseasyforunderstandingandapplying,soitisfittosmallcorporations.Certainly,thismethod

    ;wouldbeaffectedbysomesubjectivefactors.Moreover,itcannotobtainprecisefunctioncoefficients. ;Thebasicwayofarrangementistocompareeachcontrolpointwithotheronesaccordingtoallappraisement

    ;factors.Nowtakefivecontrolpointsforexample,whichcontainexamineandapprove,auditing,checkoffand

    ;keepaccountsintheoperationofcashreceivalandpayment.Usethematch-comparemethodtoconfirmthekey

    ;points.Makecomparisonaccordingtoacertainfactor,thenmark1(relativelyimportant)or0(subordination)to

    ;showwhichismoreimportantorlessimportant.Atlast,addupthescoresofeachcontrolpointtoconfirmthekey

    ;points(asshowninTable1).Invitesomeexperts(suppose20)accordingtothescaleofthecorporationandthe

    ;complexityoftheoperationstoarrangethefivecontrolpointshereinbefore.Thengathertheexperts‟advi

    ceto

    ;confirmthekeycontrolpoints(asshowninTable2,.

    ;Table1Match-compareTableoftheSignificanceoftheKeyControlPoints

    ;ExamineA

    ;uditinCheckKeepT0talC

    ;ontrolpointsandSettlementArrange

    ;approvegoffaccountsup

    ;Examineandapprove\I1ll4l

    ;Auditing0\.

    ;10l23

    ;Settlement00\.

    ;0O05

    ;Checkoff0lI‟\l32

    ;Keepaccounts00l0\l4

    ;Table2ArrangementTableof20Expels‟AppraisementoftheControlPoints

    ;ExamineandapproveAuditingSettlementCheckoffKeepaccounts

    ;ArrangeNo.Il6l030

    ;ArrangeNo.228l90

    ;ArrangeNo.3277344

    ;ArrangeNo.4.0322I3

    ;ArrangeNo.5Oll422

    ;

    ;TheResearchontheMethodstoConfirmtheKeyControlPointsoftheInternalAccountingCont~l ;1.2Factors-comparisonProcess

    ;Thefactorscomparisonprocessisanimprovementofthearrangementmethod.Itisacomparatively ;measuredwork-appraisingmethod,similartothearrangementmethod.Thedifferencebetweenthemisthatthe

;arrangementcompareseachpointcomprehensively.Butthefactorscomparisonprocesschoosesvariou

    sfactors

    ;andarrangementwillbemaderespectivelyaccordingtoeveryfactor.Finallygathertheconclusionsofea

    chfactor

    ;asthefunctionleve1.Stilltakethehereinbeforeexample,considerthreefactors:therisk,thecost/income,

    the

    ;elementandresource.Firstofall,inviteevaluators(abom20)toarrangethesignificanceofthefivefinanci

    ng

    ;operationjoints,whichcontainexamineandapprove,auditing,checkoffandkeepaccounts.Thengetthe

    factors?

    ;table(asshowninTable3).

    ;Table3FactorsAppraisementTable

    ;Benchmarkl098765432l

    ;Examine

    ;RiskandChcckoffKeepS

    ;ettlementAuditing

    ;accounts

    ;approve

    ;CheckExamine

    ;Cost/incomeandKeepA

    ;uditingSettlement

    ;ofraccounts

    ;approve

    ;ElementandExamineCh

    ;eckKeep

    ;rS0urce

    ;AuditingandSettlement

    ;offaccounts

    ;approve

    ;Accordingtothetableabove,

    ;Examineandapprove:10(risk)+8(ct/m”come)+7(elementsandresource)=25;

    ;Auditing:2(risk)+5(cost/income)+9(elementsandresource)=16; ;Settlement:4(risk)+2(cost/income)+6(elementsandresource)=12; ;Checkoff:6(risk)+9(cost/income)+3(elementsandresource)18;

    ;Keepaccounts:5(risk)+7(cost/income)+1(elementsandresource)13. ;A

    ”Unitarydisposingtheconclusionabove,wegetthefunctioncoefficientofeachcontrolpoint(asshown

    ;inTable41:

    ;Table4Functl0nC0efficients0fEachC0ntr0lPoints

    ;ExamineandKeepC

    ;ontrolpointsAuditingSettlementCheckoff

    ;approveaccounIs

    ;Functioncoecient0.298O.19OO.1430.2l4O.155

    ;Theconclusionfromthefactorscomparisonprocesswillbemoreaccuratethanthearrangementmetho

d.It

    ;canalsoreducethesubjectivefactors.Butitisnotwidelyusedbecauseofitscomplexity. ;1.3TheNumber-checkingProcess

    ;Thebasicideaofthenumber-checkingprocessistoseparatetherelativeappraisementfactorsofevery ;operationjoint,thenmakeappraisementbebasedonthestmcturalappraisementtabledesignedbefore.The

    ;commonstepsare‟(1)Analyzetheoperationandeachoperationjoint;(2)Preparetheirinstructions;(3)C

    hoose

    ;theappraisementfactors;(4)Establishstructuralappraisementtableforeachfactortoreflecttheextentof ;differencesofeachgrade.Wehavetogiveeveryfactoraproportion,whichisconsistentwiththesignificanceof

    ;thefactorinthecorporationandtheoperationinordertomaketheestimationtablemorereasonable.Atypical

    ;factorstructuralestimationtableofthenumber-checkingmethodisgivenbelow;(5)Markeachfactoraccording

    ;tothestructuralestimationtable;(6)Addupthescoresofeachfactor,wewillgettllescoreofeachcontrolpoint

    ;52

    ;

    ;TheResearchontheMethodstoConfirmtheKeyControlPointsoftheInternalAccountingControl ;Table5FactorStructuralEstimationTableoftheNumber-checkingMethod

    ;FactorsLeverlLever2Lever3Lever4Lever5

    ;Risk

    ;Riskfromthewholecorporation20406080lO0

    ;Riskfromtheoperation306090l2Ol5O

    ;Cost/income

    ;Costl530456075

    ;Incomel530456075

    ;Elementsandresource

    ;Manpower,financeandl020304050

    ;materialresources

    ;Time5lOl52025

    ;Informationtechnique5lOl52025

    ;Taketheinstanceaboveforexample,inviteevaluatorstocompareandmarkthefivecontrolpointsaccording

    ;tothetableabove.Theaverageconclusionisasfollows:

    ;Examineandapprove:riskscore250(1ever3)+cost/incomescore120(1ever5)+elementsandresource ;score8O(1ever2)=450;

    ;Auditing:riskscore150(1ever3)+cost/incomescore120(1ever4)+elementsandresourcescore20(1ever

    ;1)=290;

    ;Settlement:riskscore100(1ever5)+cost/incomescore30(1ever4)+elementsandresourcescore60(1ever

    ;4,=190;

    ;Checkoff:riskscore150(1ever1)+cost/inc:mescore150(1ever3)+elementsandresourcescore40(1ever

    ;51=340;

    ;Keepaccounts:riskscore50(1ever2)+cost/incomescore90(1ever1)+elementsandresourcescore100 ;(1ever3=240.

    ;Afterunitarydisposingtheconclusionabove,wegetthefunctioncoefficientofeachcontrolpoint. ;Table6FunctionCoefficientsofEachControlPoint

    ;ExamineandC

    ;ontrolpointsAuditingSettlementCheckoff?Keepaccounts

    ;approve

    ;Function

    ;toemcients0.298O.192O.1260.225O.159

    ;Thenumber-checkingprocesstakestheproportionintoconsideration.Soitismoreaccuratethanthe ;factorscomparisonmethod.butmorecomplexthanthefactors-comparisonmethod.However.itisconvenientto

    ;useafterwelldesigned.

    ;2.MathematiealModelMethod

    ;Itisacomplicatedandfuzzyproblemtoconfirmthekeycontrolpoints.Itjustmakesapproximately ;evaluationwhenusingthejobvaluationmethod.Whenfacedwiththesecomplicatedandfuzzyproblems,relevant

    ;matrixprocess,analytichierarchyprocess,fuzzymathematicsprocesswillbtmoreaccuratethanthejob ;valuationmethodbecauseoftheiradvantagesofobjective.systemicandcomprehensive. ;2.1RelevantMatrixProcess

    ;Thebiggestcharacteristicofrelevantmatrixprocessisthatitintroducestheconceptionofproportionto ;discriminatethefunctionofeachappraisementfactorintheholisticappraisement.Therelevantmatrixprocesshas

    ;threesteps.(1)Confirmtheindexsystemandtheproportionsystem.Intheindexsystemofthecontrolpoints,

    ;whichismadeupoftheappraisementfactors,riskfactors,cost/income,elementsandresourcearethefirstgrade

    ;53

    ;

    ;TheResearchontheMethodstoConfirmtheKeyControlPointsoftheInternalAccountingControl ;index.Theycallbefractionalizedintothesecondgradeindex(asshowninFigure1).Theproportionreflectsthe

    ;relativelys.ignificanceofthefactors.Theproportionscorrespondingtothegroupappraisementindexmakeupof

    ;theindexandproportionsystem(asshownin”fable7)(2)Singleappraisement.Usuallyappraisedbytheexperts,

    ;andthenumberiscommonlybetween7and11.

    ;lRiskfactor(w1)I-1wIj(j=l…m)

    ;llI

    ;

    ;

;

    ;ICost/inc0me(w2)IJW2j0=l…n)

    ;IIrI

    ;o

    ;

    ;.lElementandresourcel1W3i0--1…r)

    ;l(w3)1rl

    ;FirstgradeindexSecondgrade

    ;index

    ;FigureIEstablishtheConfirmedAppraisementSystem

    ;Table7IndexSystemandProportionSystem

    ;Proportionsystem(Vi)Indexsystem(Wi)

    ;0.40Risk

    ;O.35Cosffincome

    ;O.25Elementandresol,ll~e

    ;3

    ;vi:i

    ;

    ;,l

    ;DelphimethodCanalsobeapplied,whoseessenceistomakeuseoftheknowledgeandexperiencesofthe ;experts,butreducetheinfectionofauthority.Usuallythelistofexpertsiskeptsecrettomakesurethattheexperts

    ;willnotbedisturbedbyou~ide;Atthemeantime.thefeedbackandrevisewillbemade2-3timestoinsureits

    ;accuracy.(3)Comprehensiveappraisement.Itiscalculatedbytheformulashownfollowed:‟

    ;

    ;A,AijV

    ;,Il

    ;Where:Aistandsforintegratedappraisementvalue,Aijstandsforsingleappraisementvalue,vjstandsfor

    ;theproportionofeveryitem.

    ;Takethefollowingtableforexample,stillusingthefivecontrolpointsmentionedabove,toconfirmwhether

    ;theyaresignificantornot.inTable8,Wl,W2andW3standfortheriskfactor,thecost/incomefactorandthe ;elementandresourcefactorrespectively.FromtheintegratedappraisementvalueinTable8,wecanclearlyfind

    ;outhowsignificanttheyare..

    ;

    ;TheResearchontheMethodstoConfirmtheKeyControlP

    ;ointsoftheInternalAccountingControl

    ;Table8RelevantMatrixTableUsedforAppraisingandConfirmingtheKeyRoleoftheFiveControlPoints

    ;IntegratedW

    ;„W2W3

;appraisementvalue

    ;\\0.400-350.25:1|1

    ;Examineandapprove90778383.7

    ;Auditing74878l80.3

    ;Settlement64858376.1

    ;CheckOIT82808682‟3

    ;Keepaccounts85687877.3

    ;2.2AnalyticHierarchyProcess(AHP)

    ;Analytichierarchyprocess(AHPforshort),whichintegratesqualitativeandquantitativemethod.isa ;systematizationandhierarchymethodofanalyzingproblems.Itisasimplemethodtoconfirmsomerelatively

    ;complexandindistinctproblems,andabsolutelysuitableforthecasethatcannotcompletelyquantify.Analytic

    ;hierarchyprocessisdividedintofivesteps.(1)Establishthehierarchystructuremode1.Dividetherelationship

    ;intoseveralhierarchiesaccordingtotheconsequenceoftheproblem.Comparativeproblemcanusuallybe

    ;dividedinto:thegoalhierarchy(thetophierarca~,)…themainproblemtosolve;therulehierarchy(themiddle

    ;hierarchy)…theappraisementstandardtoconsider;theprojectandmeasurehierarchy(thebottomhierarchy).

    ;Morehierarchiescanbeintroducedintotheproblemofwhichconsequenceisrathercomplex.(2)Confirm,the

    ;quantitativestandardofideationjudgment,thenconstructjudgmentmatrix.Thedegreecanbedividedintofive

    ;judgmentgrades,namelyequation,comparativelyintense,intense,quiteintenseandabsolutelyintense.The

    ;gradesaredenotedbythefiguresI,3,5,7and9.Whenthedistinctionofconjugatedthingsisbetweenthetwo

    ;hierarchiesandcannotbeconfirmed,wecanget2,4,6,and8_(3)Calculatetheproportion.(4)Coincidentverify.

    ;IfthecoincidenceindicatorCI<O.1,thecoincidenceofthejudgmentmatrixissupposedtobeacceptable.(5)

    ;Integratethecollectiveattitudeoftheexpels.Thismethodismorereasonableforappraisingtheindexsystemand

    ;proportionsystem.Furthermore,itcanadvanceefficiencyandreducetheinterferenceofsubjectivefactorby

    ;computerprogram.Confirmingthekeycontrolpoints,thehierarchystructureisshowninFigure2. ;Goalhierarchy

    ;Rulehierarchy

    ;Measurehierarchy

    ;Figure2HierarchyAnalyzingPictureofSignificanceoftheControlPoints

    ;55

    ;

;TheResearchontheMethodstoConfirmtheKeyControlPointsofthe———

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    ;standardincludesriskfactor,cost/incomefactor,

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    ;=

    ;3.073,CR=O.0365(<O.I)

    ;Thecalculatedproportio?

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